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Annual Report
Provides financial results and information about the Scheme.
Trust Deed
The Scheme is governed by a legal document called the Trust Deed. This document
sets out your rights to receive benefits from the Scheme and the obligations of
the Trustee to administer the Scheme properly, invest its assets prudently and
pay members' benefits when applicable.
Prospectus
Legal description of the scheme including summarised details of the provisions
of the Trust Deed, Trustee, Fund Managers, material contracts and financial
information.
Tax Info
Taxation will affect the returns. Under current law, tax is paid by the Trustee on the assessable income of the Schemes, at the rate of 30%. This tax is deducted from the investment returns prior to being credited to your Accounts.
Member Tax Credit (only for SuperEasy KiwiSaver)
If you are 18 or over and your principal place of residence, with some exceptions, is New Zealand you are eligible for member tax credits. These will match your member contributions to SuperEasy KiwiSaver up to a maximum of $20 per week (approx $1,040 per year). Member tax credits are paid annually directly into your member’s account. If you do not reside in New Zealand for a period of time but remain in the Scheme, you are not eligible to receive your tax credit for that period. If you permanently emigrate and withdraw all your funds before you are eligible to receive a retirement benefit you will not receive any accumulated tax credits.
Tax applying to Portfolio Investment Entities
Each Scheme is a portfolio investment entity (“PIE”), which in general terms, will allow tax to be paid on members’ behalf as follows:
Investment income is taxed within each Scheme at the member’s marginal tax rate of either 19.5% or a maximum rate of 30%;
capital gains on New Zealand and certain listed Australian shares are exempt from tax; and
any distributions received from the Schemes will not be subject to tax.
The Taxation (Savings Investment and Miscellaneous Provisions) Act 2006, which was enacted on 18 December 2006, introduced the new Portfolio Investment Entity (PIE) regime for collective investment vehicles and the fair dividend rate (FDR) method of taxation for foreign shares.
The tax position of savings vehicles and the tax treatment of investments in foreign shares have been affected significantly by the Act. SuperEasy registered as a PIE effective from 1 October 2007 so as to maximise the benefits of the Act for its members. Consequently the Trustee has reassessed the investment products provided by the Fund Managers and invests in suitable PIE compliant funds for each of its investment funds.
Calculation and payment of tax
SuperEasy and SuperEasy KiwiSaver have registered as a Portfolio Investment Entity (PIE) with tax flowthrough to members from 1 October 2007.
Each Scheme will calculate and pay tax on members’ behalf at one of the following Prescribed Investor Rates:
19.5% if taxable income (other than PIE income) did not exceed $38,000 in either of the two income years immediately before the tax year in question. From the 2009 and subsequent income years an investor’s combined taxable income and PIE income must also not exceed $60,000 in either of the two income years immediately before the tax year in question.
30% for all other individuals and non-residents.
Members will be required to provide the administration and investment manager with their IRD numbers and asked to advise the correct Prescribed Investor Rate to use. Members should advise if their Prescribed Investor Rate changes. If no change is advised or the wrong rate is provided, members may have an obligation to file an income tax return and pay further tax.
Upon a member’s partial or full withdrawal of their investment or upon a portfolio switch any tax liability attributed to the member will be met by way of a debit to the member’s and/or employer’s account. If a member partially withdraws and their account balances are of insufficient value to cover the accrued liability this will be deemed a full withdrawal.
The tax paid on income attributed to members by each Scheme will be a final tax (unless the member fails to advise a Prescribed Investor Rate change from 19.5% to 30% or to advise that the correct Prescribed Investor Rate is 30% when it should be 19.5%) so no obligation to file a tax return for members’ investment in the relevant Scheme will generally arise. As at the date of the preparation of this information, income from each Scheme attributed to members will also have no impact on their family assistance eligibility, student loan repayment obligations or child support payment obligations.
Members or employers may be required to provide further information in the form required by the Trustee to ensure no fund withdrawal tax is deducted from a withdrawal.
Tax treatment of investments
Gains or losses made on shares in New Zealand resident companies or certain Australian resident companies listed on an approved list of the ASX and certain Australian unit trusts are not taxable or deductible. The PIE regime is designed to pass through these benefits to members where a Scheme invests in unit trusts or other superannuation schemes that are PIEs.
Foreign equities and offshore funds (other than certain Australian resident companies listed on an approved list of the ASX and Australian unit trusts that offer RWT proxy and meet turnover requirements) will be taxed under the Fair Dividend Rate method. Under this method, each Scheme is taxed on 5% of the average market value of its offshore shares and holdings in offshore funds. Dividends or other returns are not taxed separately, as they are considered to be included under the 5% calculation. Losses are not deductible but foreign tax credits may be available for offset against tax payable.
Foreign equities where the holding is 10% or greater, or equity investments offering guaranteed or fixed rate returns or investments in foreign funds that are 80% or more invested in New Zealand currency issued debt securities or investments determined by Inland Revenue to be debt in economic terms are taxed under the comparative value method, i.e. annual change in market value. Debt securities are taxed under the financial arrangement rules.
Employer Superannuation Contribution Tax
A specified superannuation contribution tax (ESCT) not exceeding 33% will be deducted from employer’s contributions made to the Schemes. The exception to this is in SuperEasy KiwiSaver where there is no ESCT deducted from your employer’s contribution if your contribution matches your employer’s contribution, up to the lesser of your own contribution and 2% of your gross salary or wage.
Returns to you are exempt from personal tax under current law.
Fund Withdrawal Tax
Under current tax legislation where withdrawals are made from the Schemes and the amount withdrawn arises from contributions made by your employer (or from contributions the source of which cannot be determined) the Trustee may (unless an exemption applies) be required to pay a fund withdrawal tax (FWT) of 5% of the amount withdrawn. In that case the Trustee will deduct that payment from the amount withdrawn. FWT will generally not be payable:
- If you withdraw the money when or after you stop being employed, as long as you have been with that employer for at least two years and your employer’s rate of contribution has not increased by more than 50% in either of the past two years.
- If you have earned less than $60,000 a year for the last four income years before the year of withdrawal, a sum that includes your employer’s yearly contribution to your savings and other taxable income.
- If you withdraw the money on grounds of significant financial hardship.
- If you withdraw the money on grounds of serious illness.
- If you withdraw the money on grounds of permanent immigration.
- If you withdraw the money for first home ownership.
- If the money you withdraw is needed to divide assets in settlement of a division of matrimonial property under the Property Relationships Act 1976.
- If the money is withdrawn to purchase an annuity or pension of 10 years or more duration or to purchase or pay insured benefits.
- If you transfer from one registered superannuation scheme to another.
- If you transfer from one KiwiSaver scheme to another.
- In respect of employer contributions made prior to 1 April 2000 and any continuing after that date which have not increased as a percentage of salary.
- In respect of any increase in employer contributions made pursuant to a deed or contract entered in to prior to 1 April 2000.
Tax legislation is complex and may have different or further consequences than those described in general terms above. Tax legislation may also change. Members should seek independent professional tax advice before investing or withdrawing.
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